Vat Actupdated - RS Goyal & Associates

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such dealer shall be liable to pay interest in respect of,-
(1) the tax payable by him according to the return: or
(2) the difference of the amount of tax payable according to the revised return; or
6 (3) the tax payable for the period for which he has failed to furnish return; or
(4) the amount of tax by which tax so paid along with the return or returns falls short of
the tax as per accounts, 6
1 at such rate as may be prescribed which shall not exceed 1.5 percent per month 1 from
the date the tax so payable had become due to the date of its payment or to the date of
order of assessment, whichever is earlier.
Explanation - For the purpose of this clause,-
(1) Where the period of default covers a period less than a month the interest payable in
respect of such period shall be computed proportionately.
(2) ‘month’ shall mean thirty days.
(b)
(c)
(d)
6 If a registered dealer having furnished a return under sub-section (1) or a revised
return under sub-section (2) for any period and paid the tax payable according to such
return or revised return after the time prescribed therefor or the tax paid along with the
return or returns falls short of the tax as per accounts, fails to pay interest along with
such return or revised return or payment of amount of tax by which tax so paid along
with the return or returns falls short of the tax as per accounts, in accordance with the
provisions of clause (a), the Commissioner shall levy the interest liable to be paid by
the dealer and after giving the dealer a reasonable opportunity of being heard, may
direct him to pay in addition to the tax payable or paid and the interest payable by him,
by way of penalty a sum equal to such rate as may be prescribed which shall not
exceed 1.5 percent per month of the amount of interest, from the date such interest
had become due to the date of its payment or to the date of order of assessment,
whichever is earlier. 6
If a dealer fails without sufficient cause to comply with the requirement of notice issued
under sub-section (1), the Commissioner may after giving the dealer a reasonable
opportunity of being heard, direct him to pay, in addition to any tax payable or paid by
him, by way of penalty a sum of one hundred rupees per day of default subject to a
maximum of rupees five thousand.
Where,-.
(i) no tax is payable by a registered dealer committing a default under sub-clause (iii)
of clause (a), or
(ii) a registered dealer having paid the tax payable according to a return in time fails to
furnish the return in time;
the Commissioner may after giving such dealer a reasonable opportunity of being
heard direct him to pay by way of penalty a sum of rupees fifty per day of default
subject to a maximum of rupees one thousand.
(5)(a) If the Commissioner has reason to believe that the particulars given by a registered
dealer in his return or returns furnished by him for any period under sub-section (1) or subsection
(2) are not correct he may, by giving the dealer an opportunity of being heard, verify
the correctness of such particulars in the return or returns.
(b) If on such verification it is found that the particulars given in the return or returns are not
correct in so far as they relate to the application of the correct rate of tax, the calculation of